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July 08, 2006


Thanks for the mention, Rick. Glad to see you, Brad and Fred pick this one up. I've never seen it myself, and would tell anyone to run fast in the opposite direction if it ever surfaced.

The thing about break fees is this: they are designed to ensure that the Board has decided if they want to do a deal at the start of the process, provided that the terms don't change, and not at the end. If the VC bails on the deal for due dili reasons, there's no break fee to pay.

After a few meetings it is hard to know if you can trust someone just yet. Thus the concept.

As the former Legal Counsel at DWL said to me in the summer of 2001: "we didn't mean to let you down" just happened.

If -- for example -- someone like Iogen ( is going to burn you, there isn't much you can do about that obviously. Rick's right there. But the concept is meant to at least ensure that the Board won't execute term sheets willy-nilly. Or so you hope.

oh nice post.. it gives me some solid insight

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